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PES Olga Kerimova, SVP Analysis and Kristine Vassbotn, Senior Analyst
2021 to bring additional 2.5 million bpd of liquids supply to the market after 2020 Global liquids supply shrank by 6.1 million barrels per day (bpd) last year as a result of the crash in oil prices and the global outbreak of Covid-19. Supply is expected to recover in 2021, primarily driven by additions from OPEC+. This article explains the key industry trends from last year and highlights the expectations for 2021 through analysis of supply growth, exploration success and spending trends.
Figure 1: Year-on-year net additions in global liquids supply. Supply split by supply segment – million bbl/d. (Source: UCube from Rystad Energy, January 2021)
Figure 1 shows changes in global liquids production from different supply segments and compares the current outlook to our forecast a year ago. Last year’s supply decline was driven by OPEC, which accounted for an estimated 4 million bpd of the 6.1 billion bpd drop, while conventional nonOPEC sources contributed 2 million bpd. In contrast, shale and tight oil production remained flat compared with 2019 volumes. Rystad Energy 50 PESGB January/February 2021
expects this year’s recovery in liquids additions to average 2.5 million bpd. The growth is spread across the different segments, except for shale, which is expected to decline 0.35 million bpd. Furthermore, oil sands supply could grow by 0.35 million bpd, while offshore (non-OPEC) is expected to increase by 0.7 million bpd. We expect higher conventional onshore production from non-OPEC countries of around 0.6 million bpd,
driven by Russia and Kazakhstan. Total OPEC liquids production is expected to climb by 1.2 million bpd due to expanded OPEC+ quotas. OPEC+ met in December 2020 to tweak the supply strategy for the coming year and agreed to gradually increase production by a maximum 0.5 million bpd per month from January 2021, towards the nearly 2 million bpd higher target level which has been in place since 12 April 2020.
